In the first part of this article series I dealt with the first 4 of the top 10 things to take note of when reviewing the annual general meeting (“AGM”) pack, and preparing to attend the meeting. This article will guide you through the next 3.
5. Prescribed agenda items
Prescribed Management Rule (“PMR”) 17(6), contains the prescribed order of business (or “the agenda”) at general meetings. The first 8 agenda items relate the all general meetings, and are as follows:
- a. confirm proxies, nominees and other persons representing members and issue voting cards;
- b. determine that there is a quorum;
- c. elect a person to chair the meeting, if necessary;
- d. present to the meeting proof of notice of the meeting or waivers of notice;
- e. approve the agenda;
- f. approve minutes from the previous general meeting, if any;
- g. deal with unfinished business, if any;
- h. deal with any motions or matters for discussion at special general meetings (“SGMs”) requested by members or bondholders.
The ninth agenda item deals with the business to be dealt with at the first general meeting.
The next agenda items relate only to the AGM, and are as follows:
- a. receive reports of the activities and decisions of trustees since the previous general meeting, including reports of committees;
- b. approve the schedules of insurance replacement values, with or without amendment;
- c. determine the extent of the insurance cover by the body corporate;
- d. approve the budgets for the administrative and reserve funds for the next financial year;
- e. consider the annual financial statements;
- f. appoint an auditor to audit the annual financial statements, unless all the sections in the scheme are registered in the name of one person;
- g. if the body corporate has more than four members who are owners of primary sections and is not managed by an executive managing agent, determine the number of trustees to be elected to serve during the next financial year; and
- h. elect the trustees.
The final 4 agenda items relate all general meetings, and are as follows:
- a. report on the lodgment of any amendments to the scheme’s rules adopted by the body corporate and, if applicable, table a consolidated set of scheme rules;
- b. deal with any new or further business;
- c. give directions or impose restrictions on the trustees; and
- d. dissolve the meeting.
6. Stand out agenda items
PMR 17(7) states that the trustees must determine the agenda for the AGM, but that the above mentioned prescribed agenda items must be dealt with. Furthermore, the agenda must contain a description of the general nature of all business, and a description of the matters that will be voted on at the meeting, including the proposed wording of any special or unanimous resolution. Examples of stand out agenda items would therefore be proposed special and unanimous resolutions.
7. Financial statements
In terms of PMR 26(1)(c) the trustees must prepare annual financial statements for presentation at the AGM. These financial statements must include analyses of the:
- 1. Amounts due to the body corporate (including levies, special levies and other charges such as fines). The amounts must be classified by member and the periods for which such amounts were owed.
- 2. Amounts due by the body corporate to its creditors generally. More specifically, the amounts due to any public authority, local municipality or other service providers must be disclosed. The amounts must be classified by creditor and the periods for which such amounts were owed.
- 3. Amounts advanced to the body corporate by way of levy finance, a loan, in terms of a guarantee insurance policy or otherwise, setting out the actual or contingent liability of the body corporate and the amounts paid by the body corporate and by any member in terms of such arrangement.
- 4. Amounts in the reserve fund showing the amount available for maintenance, repair and replacement of each major capital item as a percentage of the accrued estimated cost and the rand value of any shortfall.
- 5. Premiums and other amounts paid and payments received by the body corporate and any member in terms of the body corporate insurance policy and the expiry date of each policy.
- 6. Amounts due and payable to the Community Schemes Ombud Service.
If you have experienced any problems with understanding your AGM pack, and require our assistance with preparing for your body corporate’s AGM, please contact email@example.com.
Please click here to read part 3 of this article series.
Article reference: Paddocks Press: Volume 12, Issue 10, Page 01.
Dr Carryn Melissa Durham is one of the most highly qualified Sectional Title Attorneys in the country (BA, LLB, LLM and LLD), Carryn forms part of the Paddocks Private Consulting Division.
This article is published under the Creative Commons Attribution license.